TRUST companies in the Isle of Man and Cayman Islands are implicated in a major fraud investigation against two Texas billionaire brothers who are amongst the Republican Party’s most prolific donors.

Sam and Charles Wyly were charged last week by the Securities and Exchange Commission (SEC) with a 13-year scheme to hide their stock transactions illegally via a tangled web of offshore trusts, including sham trusts in the Isle of Man.

The SEC has alleged that the Wylys concealed ownership of stock in four companies on which they served as board members. The scheme was allegedly designed to allowed the brothers to buy and sell large holdings in companies without reporting the transactions.

It has been suggested that the Wylys, who made money in the software industry and later in hedge funds, sold more than 14 million shares, making profits of $550 million. They are also accused of making $32 million in one single transaction. Their attorney and stockbroker have also been charged.

The Wylys - who are both in their 70s - donated more than $2.5 million to Republican candidates over two decades and allegedly raised more than $100,000 for George W. Bush’s 2000 presidential campaign.

The SEC alleges that the brothers used “ill-gotten gains” from the offshore accounts to fund their business operations in the US as well as to buy property and “tens of millions of dollars worth of art, collectibles and jewellery” for themselves and their families. It is further alleged they used the accounts to cover some of their charitable donations.

Almost all of Sam Wyly’s $10 million donation to the University of Michigan Business School in 1996, for the construction of Sam Wyly Hall, was funded through Isle of Man transactions, the complaint says.

The allegations against the Wylys are not new. In 2006 a congressional investigation made similar accusations against the brothers stating that the Wylys “kept [investors] in the dark about the offshore stock holdings and trading activities . .”